Overall Bankruptcy Rates Continue To Drop

Despite challenges from the pandemic as well as bad weather, the tide of Chapter 12 bankruptcies appears to have turned. According to the American Farm Bureau Federation, higher commodity prices and government support resulted in a year-over-year drop in farm bankruptcies. Between June 2020 and June 2021 there were 438 Chapter 12 bankruptcy filings, down 24%. The number of Chapter 12 filings over the last year is at the lowest level since 2015. The decrease in bankruptcy filings is a noteworthy shift considering the significant number of bankruptcies during the previous three years.

The Southwest U.S. saw the largest increase in the number of Chapter 12 filings by total numbers and by percentage. Filings increased in three of the six states, including Colorado, Oklahoma, and New Mexico. Filings also increased in the Northeast U.S. Four regions of the country had better news, with double-digit drops in the number of Chapter 12 filings by total numbers and by percentages. The Southeast had 54 fewer Chapter 12 filings; a 44% drop from the prior year. The Midwest, which leads all regions with their number of filings at 235, still had 61 fewer Chapter 12 bankruptcies in the past year, down 21% from the previous year.

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